Many consumers are paying for hefty data plans for their mobile phones but using just a fraction of their monthly allowance, new research has found.
These users could dramatically slash their monthly mobile bills if they switched to a more suitable plan, Which? magazine says.
In February the consumer group surveyed more than 4,000 mobile phone users about their data usage and mobile tariffs over the previous 12 months. It found that among both SIM-only and contrast users, 44% have a data allowance of more than 10GB per month, including those with unlimited plans.
However, nearly half (47%) of subscribers use less than 3GB monthly and 72% use less than 5GB, implying that millions are overpaying for their mobile plans. Among SIM-only users, the gap between their data allowance and actual use was 14GB.
As the pandemic has kept us at home, logged onto our WiFi, and reduced the amount of time we spend streaming music, gaming and watching video content on the go, our data usage has fallen even more. The gulf between our data allotments and actual use has increased by 4GB since the start of the pandemic, Which? said.
The consumer group also highlighted another area where mobile users are overpaying: continuing to be billed a handset that’s already been paid of at the end of a bundled contract. Last year, the group found that 36% of customers whose contracts had ended in the previous two months are overpaying in this way.
In 2019, Ofcom estimated that 1.4 million mobile users were out of contract and paying for mobile phones they technically already own. On average, customers who are out of contract and still being charged for their device are paying £11 more than they would if they switched to a comparable SIM-only deal. The telecoms regulator estimated that this loyalty penalty is costing mobile users £182 million per year.
In a voluntary code that came into force in February 2020, all major mobile operators except Three promised to automatically reduce bills for customers with bundled plans when their minimum term is up. However, in many cases the amount they discount is limited.
While O2 and Virgin Mobile cut charges for out-of-contract pay monthly customers to the equivalent of a 30-day SIM-only deal, Vodafone only reduces bills by £5 per month and EE by 10%, meaning their customers are still at risk of overpaying. Three doesn’t trim bills at all, despite calls from Citizens Advice for it to sign onto the voluntary code.
Which? crunched the numbers and found that a Three customer with a Samsung S20 5G phone, could end up paying £37 per month—or £444 per year—more than the provider’s equivalent airtime deal.
Customers can dodge these unfair charges by contacting their provider when their contract is up and switching to a SIM-only deal. They can also switch to a SIM-only plan from a competitor, which may be cheaper.
A requirement, in force since February 2020, that telecoms providers send end of contract notifications could prompt more customers to switch when their deals are up.
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